SCOTCH whisky veteran Billy Walker has declared the long-term future of the industry is bright as he revealed plans to build new warehouse facilities at his GlenAllachie Distillery in Speyside.

But fellow distiller Euan Mitchell, managing director of Isle of Arran Distillers, has said he expects 2024 to be a year of consolidation for the sector.

Mr Walker, who has led GlenAllachie since leading a consortium to acquire the distillery from Chivas Brothers in 2017, told The Herald that planning permission in principle has been secured to build a second warehouse on the site next year.

It comes shortly after the distillery announced in November that it had secured a grant which will enable it to invest in technology to reduce energy demand by 50%, and follows a bumper season for its new visitor centre, driven by “amazing” international footfall, after a significant upgrade to its facilities.

The distiller also unveiled its new peated single malt, Meikle Tor, to industry acclaim in September.

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The new warehouses, which GlenAllachie hopes to be constructed and in use by the end of 2025, will increase its maturation capacity by 20%, equal to around 25,000 casks.

Mr Walker told The Herald: “We will definitely be building new warehouses next year. That will be compatible with the rest of the industry, so that shows you there is a confidence element feeding through the industry. And it is a long-term confidence.”

He added: “It is a big part of our thinking going forward. We will maybe increase our production a little bit, and it allows for long-term storage and looking forward to having 15-year-old in 15 years’ time, or maybe a 25-year-old, all of that. It’s all part of the long-term plan.”

Mr Walker, whose career has featured spells with Ballantine’s, Inver House, and Burn Stewart, and built up the BenRiach Distilling Company before its sale to Brown-Forman in 2016, said 2023 had been another strong year for GlenAllachie.

Unveiling its latest accounts in September, The GlenAllachie Distillers Company highlighted the dynamism of the single malt category in Asia as it reported a leap in turnover to £20.7 million from £14.8m in the year ended December 31, 2022. It was the first-time sales at the company had exceeded £20m.

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Over the course of 2023 GlenAllachie has continued to see healthy sales in Asia, as well as Europe, the US, and the UK.

Mr Walker said: “The category is pretty strong, pretty sound. And certainly in the big companies, it is in safe hands. They have the interest of the category at heart, and that is really important.”

Mulling the outlook for 2024, he said: “Just looking at the current year, we have had a really good year, everywhere in the world. Asia has been amazing and will continue, in my opinion, to be one of the very important drivers for our business.

“Europe has been steady, the United States has been pretty good, the UK has been strong. South America is a territory we are still quite weak in, but we aspire to be there.

“What does 2024 hold? I am not sure that our position is that we have overstocked our importers. We think there will be some headwinds in 2024 but we are not overwhelmingly negative of where the future is. Our network of importers are probably not people who want to overstock, they will be much more prudent in terms of how they manage their cash. So we are hopeful that 2024 will be a good year. We know there will be some issues and some headwinds, but we just need to gear ourselves up and make sure that we are on the front foot.”

Isle of Arran Distillers has also enjoyed a positive year in 2023, which came to a climax recently when it lifted a handful of trophies at the Scotch Whisky Awards. These included the title of distillery of the year for Lagg, its new distillery on the south of Arran which began producing in 2019 and an award for Isle of Arran 10-year-old malt (best under-12 non-peated whisky), which is made at the company’s eponymous – and original – distillery at Lochranza.

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Managing director Euan Mitchell said demand in 2023 had been good albeit not as strong as in previous years, when there was an uplift as people bought whisky to enjoy at home during periods of lockdown and Covid restrictions.

Looking ahead to 2024, Mr Mitchell, who highlighted France, Japan, China, Germany, and the UK as key markets for the Isle of Arran distilleries, anticipates that it could be a tougher year.

“There is a general sense that next year [2024] could be quite challenging,” he said. “There is a lot of stock out in the market - between retailers, wholesalers, distributors there is quite a bit of stock out there. In the spirits category as a whole, the pull-through hasn’t been quite what it was.

“There is a feeling that next year, just with everything going on, all the challenges around the world, could be a bit of a year to let things settle down; get inventory balances back in check and then we will hopefully see the demand growing again from the tail end of next year [and] into 2025 and onwards.”

Asked why there is a surplus of stock in the market, Mr Mitchell said: “There has been a lot of pressure on consumer spending for a while now [and] it is starting to have a wee kick in. I think people are just cautious about the purchases they are making. You are just seeing very small, subtle changes in consumer behaviour but if you spread that out across all of the whisky-buying public then it has quite a significant impact. That is certainly part of it.

“Globally, the spirits market really did pretty well over the last few years, even across the Covid period, certainly if you were not reliant on things like travel retail and on-premise sales. Retail remained very strong.

“People were staying at home, they had more disposable income at that stage, they were ordering whisky online and they were spending more than they would normally because they were enjoying better spirits at home. I think that led to a lot of optimism post-Covid and a lot of pipeline-filling going on.

“We have now got to a point where consumer demand is not keeping up with that level of inventory, so you are starting to see a little bit of a backlog at the moment and a slower pull-through. It just takes time to get that back in balance.”

He added: “But our long-term view still remains very optimistic. We still see strong demand for premium spirits, and premium single malt Scotch whisky in particular around the world. Any slight slowdown, we believe, will be a temporary thing.”